The Green Party is proposing to lift the minimum wage to $18 an hour by 2017 and to introduce a living wage for the Government sector.
The party released its workers' policy in Wellington today and says it aims to ensure all workers have enough money to live on.
Co-leader Metiria Turei said if the party formed part of the next government it would immediately raise the minimum wage to $15 an hour and gradually increase further.
"I want to live in a New Zealand that is genuinely fairer, where everyone gets a fair reward for a fair effort," she said.
The Greens would also introduce a minimum redundancy package of four weeks pay and companies would be required to report on the gap between top and bottom pay.
The party is also pledging to pay all core public service staff a minimum of $18.80 an hour.
Prime Minister John Key said the Green Party's pledge to raise the minimum wage by 2017 will end up sending people to the dole queue.
"This is sort of voodoo economics from Labour and the Greens, that somehow through the stroke of a pen they can lift the minimum wage, and have no impact either on inflation, on the likelihood and employer will take someone on, or the fact that the businesses can afford it."
Business New Zealand head Phil O'Reilly said the policy would significantly add to the costs and risks of employing.
And he says the most vulnerable employees would be the most likely to suffer.
"You might want a high minimum wage, but actually not many people might be employed under it, and that's the problem."
Mr O'Reilly said the Greens need to invest much more in building the skills of the unemployed.
But Council of Trade Unions president Helen Kelly said that such a wage rise would benefit economies such as the Wairarapa and encourage spending.
She said a Labour-Green government would vastly improve workers' quality of life.
Ms Turei said the Crown would make more in tax revenue from raising the minimum wage, than the policy would cost.
The party is estimating the overall cost of the package would be nearly $1.2 billion over three years and would be offset by the Crown earning about $1.9 billion in tax revenue, she said.
POVERTY
ECONOMY